Omnova Solutions Inc. has entered into an agreement with AXA Private Equity of Paris granting the Fairlawn-based company what it called “a period of exclusivity” to acquire specialty chemicals manufacturer Eliokem International of France.
Omnova, a manufacturer of specialty chemicals, emulsion polymers and wallcoverings, said it would pay about $300 million for Eliokem at current exchange rates.
Omnova said the proposed deal's closing is subject to consultation with Eliokem's Works Council (an institution that represents employees) in France, completion of a definitive agreement, regulatory approvals and financing.
Subject to those conditions, Omnova said it expects to complete the transaction by the end of 2010.
Eliokem is the former specialty chemicals business of Goodyear Tire & Rubber Co. of Akron, Ohio.
Omnova said it intends to raise $425 million of new long-term debt to fund the transaction and the repayment of all existing Omnova and Eliokem debt.
In addition, Omnova said it plans to extend and increase the size of its unused asset-based credit facility to $100 million and expects to have $40 million in cash at the closing of the acquisition. Omnova expects the transaction to be neutral to slightly dilutive to earnings in 2011, but accretive in 2012.
“This acquisition will transform Omnova Solutions into a much larger, more diverse specialty chemical and functional surfaces company with significantly enhanced global capability,” Omnova Chairman and CEO Kevin McMullen said in a statement.
“It is an excellent fit with Omnova's strategy to grow in existing markets, penetrate new adjacent markets and globalize our company.”
Eliokem is a worldwide producer of specialty polymers and chemicals, including coating resins, elastomeric modifiers, antioxidants, rubber reinforcing resins and oil-and-gas drilling chemicals.
The company's 12-month sales through May totaled $268 million.
Eliokem is headquartered in Villejust, near Paris, and has manufacturing sites in Caojing and Ningbo, China; Valia, India; Le Havre, France; and Akron. Eliokem also has regional sales offices in Akron, Singapore, Shanghai and Mumbai, India.
The French company employs about 630.